European shares ease, with central banks in focus; Lonza drops on CEO exit

By Bansari Mayur Kamdar

(Reuters) -European shares eased on Monday, after sharp gains last week, as investors braced for a week packed with global central bank meetings, including rate decisions from Norway, Sweden, Switzerland, the UK and the United States.

The pan-European fell 0.4% by 0805 GMT, with healthcare and rate-sensitive technology stocks weighing on the index.

Global central banks will take centre stage this week after the European Central Bank (ECB) signalled an end to rate hikes last week. The Bank of England (BoE) is likely to hike rates for the 15th time later in the week, while the Federal Reserve seems set for a hawkish pause.

“If the BoE does deliver a hike, we expect it to be similar to the ECB, with subsequent commentary indicating that they are likely done with hikes,” Mohit Kumar, chief European economist for Jefferies, said in a note.

“The CPI data which comes just a day before the MPC meeting could sway the decision if it surprises strongly.”

Goldman Sachs lowered its forecast for the BoE’s terminal rate by 25 basis points to 5.5%.

Markets remained cautious as euro zone bond yields edged higher after hawkish remarks from some ECB officials post their rate decision.

ECB Governing Council member Yannis Stournaras said governments must do their part in reining in consumer prices after borrowing costs reached a level that may well be their peak, Bloomberg News reported on Sunday.

Nordic Semiconductor ASA shed 13.2% to drop to the bottom of the STOXX 600 after cutting its revenue guidance for the third quarter. Peer Fingerprint Cards fell 5.8%.

Societe Generale (OTC:) fell 6.3% after France’s third-biggest bank said it expected little, if any, growth in annual sales over the coming years in a keenly-awaited strategic plan from its new CEO.

Lonza’s chief executive, Pierre-Alain Ruffieux, will leave the Swiss company by mutual agreement at the end of the month, sending the contract drug manufacturer’s shares down 9.6% on concerns about the group’s medium-term profit prospects.

Martin Sorrell’s ad group S4 Capital slumped 22% on cutting its annual forecast for the second time in as many months, saying recession fears were making clients cautious.